Opening a new store is an exciting endeavor. After all, it is the start of something big. However, in the rush of finding the perfect location, many retailers will miss one important fact that can affect their business for years. We are talking about the property agreement. You might be surprised to know that even experienced business owners make mistakes because they are overly focused on the shop instead of paperwork. This is exactly why many retailers speak with solicitors in Farnham, Winchester, or wherever they work, before signing anything.
Read on to learn more.
Signing Without Reading the Details
Surprisingly, this mistake can happen more often than you might believe.
Many retailers only skim through an agreement because they are so eager to secure the property. They assume that everything is standard. In reality, every agreement is different.
Even small details affect how long you can stay on the property. They also affect the repairs you must pay for or whether you can make any changes to the space you are renting.
You must understand the full picture, which is why reading every page carefully is mandatory.
Not Paying Attention to Future Business Needs
You must avoid the mistake of ignoring future business needs.
The shop might work today. However, it might not work a few years from now. Your business might grow, need extra parking, or need storage. You might even want to move to another location.
Thinking ahead now can help you avoid the following:
- Costly changes
- Unexpected restrictions
- The need to break the agreement before it ends.
The thing is that if the agreement does not allow flexibility, you will find yourself stuck.
Before signing the agreement, consider your future needs.
Overlooking Hidden Expenses
The monthly rent of your retail shop is only one part of the total expense!
Some agreements include extra costs for the following:
- Maintenance
- Cleaning shared spaces
- Building repairs
- Security
- Insurance
These expenses can really add up, putting pressure on your budget.
Make sure to ask for a complete breakdown of every payment you might have to make!
This is also where the importance of legal advice becomes clear.
You need someone with professional experience to review the agreement before you sign it. They can indicate hidden costs and explain confusing sections in simple terms.
Believing that Verbal Promises Suffice
Never make the mistake of assuming that verbal promises are enough.
For instance, a landlord may promise to repaint the shop. They might promise to improve the parking lot. Conversations can sound reassuring. The only problem is that verbal promises are impossible to enforce later. Make sure that everything is written clearly in the agreement.
The thing is, many disagreements only start when one person remembers a conversation differently from the other. And this can happen more often than you may think.
A written agreement can protect and help remove confusion. More importantly, it protects both sides from disputes. Before you sign, make sure to read the contract carefully.
Make sure that every deadline, repair, upgrade, promise, or special condition is included. If you feel that something is missing, make sure to ask for it to be added. You need to do this before putting your signature on the agreement.
Rushing Through Things Because of Excitement
Finding the perfect retail location can create pressure.
You might worry that another business might take over if you keep waiting too long. This feeling causes retailers to rush through the process. Due to this, they ignore several things and sign without completely understanding the agreement.
Take your time and read everything carefully. When something feels vague, communicate and ask questions.
If you actually spend a few extra days analysing the agreement, it can protect you from expensive mistakes. It can also protect you from legal problems later.
Whenever possible, ask for a legal professional who can carefully review it before you sign it. They are in the best position to notice potential risks that are otherwise easy to miss.
Looking Ahead
Now you know that a commercial property agreement is so much more than a piece of paper!
It can affect the future of your retail business.
It is certainly in your best interest to take your time and read every detail. A little patience before signing the commercial property agreement leads to a smooth journey. You can focus on serving your customers.
Disclaimer
Please be advised that this article is for informational purposes only and should not be used as a substitute for advice from a trained legal professional. Please seek the advice of a legal professional if you’re facing issues regarding signing a property commercial agreement.
Terry Clark is the Publisher and Content Director of 365 Retail, with more than a decade of experience covering retail design, technology innovations, store openings and the wider retail industry. He also works closely with leading retailers, suppliers, agencies, events and industry awards across the UK.
